Existing home sales at 30-month low

Washington— Sales of existing homes, which account for more than two-thirds of all housing activity, fell in July to its lowest level in more than two years, skidding down by 4.1% to a seasonally adjusted annual rate of 6.3 million units, the NationalAssociation of Realtors (NAR) reported.The rate is the lowest since January 2004.

Sales fell off in every region, with the biggest drop recorded in the West, the one part of the country where sales had held up even when others reported declines. Sales in the West fell 6.4% from June, and were 18.0% lower than year-ago levels. Salesin theMidwestwere off 5.9% from June and 10.1% from last year, and Northeast sales fell 5.4% from June and 12.5% from last year. The smallest decline was recorded in the South, off 1.2% from June, but 7.0% from a year ago.

Reflecting the lull in housing activity, the inventory of unsold houses rose 3.2% at the end of July to 3.9 million homes, a 7.3 month supply at the current rate of sales.

Looking for a silver lining, David Lereah, NAR chief economist, said higher interest rates had put a crimp in sales and applied downward pressure on home prices, "but that price-softening is good news for the housing market because it is drawing buyers."